Asia is emerging as a surprising weak link in an otherwise strong global economic recovery. Factory production is contracting across Southeast Asia and measures of manufacturing activity in China last month were at their lowest levels in more than a year. The WSJ’s Stella Yifan Xie and Jon Emont report the flagging factory output comes as new Covid-19 outbreaks are hitting several countries and fresh pandemic restrictions restrain manufacturing and hit export flows. In the West, relatively higher vaccination rates are allowing economic activity to return to normal levels. Covid clusters have hit shipping operations, first at the Yantian port in Shenzhen, China, and recently in Vietnam. The impact is reaching deeper into supply chains, with restrictions like Malaysia’s closure of factories in nonessential sectors such as apparel sharply limiting suppliers. Such actions are leading to problems in other countries because of the region’s tightly integrated supply chains.

Some of the biggest international markets for coal may start drying up. Banks are cutting off funding for new coal-fueled power plants in poorer Asian countries, the WSJ’s Phred Dvorak, Sha Hua and Frances Yoon report, and even some financiers in China are signaling they plan to stop or slow backing for projects outside their borders. The pullback led by banks in Japan and South Korea could force poorer countries that lack their own funding sources to crimp coal-expansion plans and accelerate transitions to alternative energy sources. Asian financiers provide the bulk of funding for new coal projects in countries such as Vietnam and Bangladesh. Coal-fueled power plants are hardly going away. China and India are the two biggest sources of new carbon emissions from coal and both countries have big pools of domestic funding and plans to keep expanding their own coal-burning fleets.

Debates over fuel-efficiency standards for vehicles are about to heat up again. The Biden administration is expected to announce stricter emissions rules for new cars and light trucks as early as this week, the WSJ’s Katy Stech Frank reports, fulfilling a pledge to reset tailpipe-emission limits eased by former President Donald Trump. The new rules are expected to apply to vehicles through the 2026 model year, providing new urgency for car makers to reconfigure their production lines and supply chains for electric vehicles. Any changes for heavy-duty trucks would likely come on a separate track, but investments in the technology and the charging infrastructure needed to ramp up low-emissions automobiles may raise pressure on the commercial trucking sector to step up anti-pollution efforts. The auto industry says it needs federal funding for electric-vehicle charging stations, consumer tax credits for EV purchases and other measures to meet ambitious targets.

A measure of U.S. factory activity fell to a six-month low in July amid strong orders and a shortfall in supplies. (MarketWatch)

A National Labor Relations Board official recommended nullifying the results of a vote by Amazon warehouse workers in Alabama rejecting a plan to join a union. (WSJ)

A.P. Moller-Maersk sharply raised its full-year guidance on a preliminary estimate of strong second-quarter revenue growth. (Dow Jones Newswires)

GXO Logistics CEO Malcolm Wilson says the newly spun off company is open to "opportunistic M&A" in a contract logistics sector "ripe for some consolidation." (Dow Jones Newswires)

Foot Locker is buying two smaller retailers for a total of about $1.1 billion in separate cash deals. (WSJ)

Vietnam overtook Bangladesh as the world’s second-largest apparel exporter after China. (Sourcing Journal)

Ford is revamping supply-chain operations and engaging directly with semiconductor fabricators as the auto maker copes with a chip shortage. (Supply Chain Dive)

Container line Ocean Network Express reached a $2.5 billion net profit in a fiscal quarter that included 100% capacity utilization on major trade lanes out of Asia. (Journal of Commerce)

Container shipping experts say new capacity is being absorbed by the persistent delays created by port congestion. (Lloyd’s List)

Rising Covid cases in Vietnam are triggering growing backups at the country’s ocean container terminals. (Splash 247) 

U.S. furniture shipper MSC Industries filed a formal regulatory complaint that major container lines had “colluded” to raise shipping rates. (The Loadstar)

Throughput at DP World container terminals world-wide was up 7% in the second quarter over the same period in 2019. (Container Management)

Cosco Shipping Ports opened a rail-served container terminal on the Yangtze River in central China at Wuhan. (Port Technology)

Japan’s Isuzu and Hino Motors are seeking openings with shipping and logistics companies for their no-emissions light trucks. (Nikkei Asia)

Paul Page is editor of WSJ Logistics Report. Write to him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @jensmithWSJ, @pdberger. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.